Private capital moves into commercial launch sector
The first commercial space launch rocket company in China has secured financing of 1.2 billion yuan (1.36 million), which will be used for the development and launch of its Kuaizhou series carrier rockets, the company said on Tuesday.
The Kuaizhou rockets were developed by Expace, the commercial space launch rocket arm jointly established in February 2016 by State-owned China Aerospace Science and Industry Corp (CASIC) and China Sanjiang Space Group.
The company said it signed funding agreements with eight investment institutions at the Shanghai United Assets and Equity Exchange on Monday. The funds will be used for the research and development of its Kuaizhou series carrier rockets, a rocket assembly facility and other upstream and downstream commercial space businesses, according to a document that Expace sent to the Global Times on Tuesday.
Expace Chairman Zhang Di said at the signing ceremony that the Kuaizhou-11, the company's latest carrier rocket, has entered the testing and debugging phase and is scheduled to embark on its maiden flight carrying six satellites in the first half of 2018.
Among the eight investors, Zhejiang United Investment Group (ZUIG) provided private-sector funding.
"Our investment in Expace is indeed our first foray into the commercial aerospace sector," Zhou Guanxin, vice president of ZUIG, told the Global Times on Tuesday. Zhou didn't specify the scale of investment.
"Such cooperation will not only incorporate more private-sector subcontractors but also draw efficiency and capability from other interested parties. The civil-military integration strategy creates access for private investors such as us, giving us the opportunity to participate in the commercialization of space technology," Zhou noted.
Lan Tianyi, founder of Beijing-based Ultimate Blue Nebula Co, a space industry consultancy, told the Global Times on Tuesday that "the door has been opened wider for private funds in recent years to enter the commercial space industry, where it takes a minor share."
Compared with governments, private investors are more concerned with achieving profitability, which they see as a medium- or long-term process since it takes time to reduce unit costs, explore markets and then make money, he noted.
In terms of customers, "more and more nongovernmental customers have a demand for launch services to send up satellites for communications, remote sensing or experimental applications," Lan said.
Expace aims to launch small satellites for domestic and foreign customers, including the Chang Guang Satellite Technology Co in Changchun, capital of Northeast China's Jilin Province.
With advances in digital technology, more small and micro-sized satellites are being launched, which means that makers of traditional, medium-sized or large rockets need to develop smaller ones at the same time, an industry insider, who preferred not to be named, told the Global Times on Tuesday.
However, compared with large rockets, smaller ones have a disadvantage in terms of unit costs based on the payload, the insider said, so it's critical to cut costs.
"Developed as a low-cost, quick-response launch option, the Kuaizhou series offers competitive launch services, which we believe have strong potential in serving both domestic satellite operators and those along the Belt and Road initiative regions. That's a billion-dollar market as the cost of producing micro-sized satellites is more affordable for commercial applications," Zhou of ZUIG said.
China's commercial space industry is still at an early phase compared with strong ones such the US, but there are great prospects, experts noted.
Besides the rocket arms of traditional giants in the aerospace sector, private companies are also getting involved in the development of rockets, although they don't yet have products on the market, Lan said. Also, these firms are not good at cost controls in the initial phase compared with State-owned producers.
Private-sector start-ups are also participating in the development of launch vehicles, although they also don't yet have products on the market, Lan said.
Also, these companies don't want to compete with State-owned ones. They are more excited about new trends in space science, such as the liquid oxygen-methane engine from the Beijing-based start-up LandSpace. These inventors and trends represent the future of new space power in China, he remarked.